Crisis Management: New Crisis Lessons – Bad and Good: Crisis Response
By now every leader realizes that she or he must know about managing a crisis in the public eye. For the rare unaware executive, we are blessed with four current enlightening real-world examples of how to do it right – and wrong.
Let’s get wrong out of the way first. Is there anyone who does not know the missteps of Dan Rather and CBS News’s handling of the President Bush bashing story based on faulty documents? Let’s count the violated principles. 1) Go Fast (it took them two weeks), 2) Fix the problem (they’re still working on that one), 3) Don’t make it worse (they insisted no mistakes while bloggers exposed reporting flaws almost from day one), 4) Get it over with, and 5) keep stakeholders in the loop (from Andy Rooney to Bob Schieffer to Steve Croft, even CBS insiders couldn’t comprehend the snail’s pace). So, the welcome apology by Rather and the appointing of outside experts to fix things were also late.
Examples of doing it right:
First: Merck pulling off the market pain-reliever Vioxx because of potential cardiac dangers. After first being warned September 24 of the threatening side effect revealed in a new study, the product – a $2.5 billion a year blockbuster accounting for 11% of company sales – was gone within a week. That’s fast. The CEO announced it himself in a televised news conference September 30 and through other media appearances. A good start. Of course, the stock price plunged almost 1/3 and the Dow Jones Industrial Average itself dropped because Merck is one of the 30 stocks comprising the Average. Existing lawsuits will now flare and more will follow. Thus: the sometimes harsh price of doing the right thing. I liked The Wall Street Journal’s quote from an asset fund heavily invested in Merck. Hennessy Advisors president Neil Hennessy said, “I’m getting crushed, but I’d rather have the stock down for a good reason than a bad reason. You can at least have confidence… that they’re going to do the right thing in the future.”
Second: National Geographic. The October issue column from Editor Bill Allen began, “We let you down.” Those four little words immediately signaled this was an organization saying something went wrong, that the buck stopped at their chin and they were willing to take the punch. It concerned pictures illustrating a story of how the Barabaig people in Tanzania still hunt elephants. A picture ostensibly showed men carrying tusks from an elephant one of them had killed. In fact, the tusks were borrowed by the photographer from the Tanzania Department of Wildlife and given to the men to hold for the photo. He faked three pictures and lied to the magazine about it! Editor Allen explained why the fraud was not caught at first, how National Geographic quickly notified readers on its website in July when it did eventually discover the foul-up, and then disarmingly offered, “I’m still losing sleep over the fact that we failed to uncover the truth before publishing the pictures.” The editor wrote about the values of the magazine, how they had been violated, and ended with four more simple words, “You have our apology.”
Third example of good crisis management: Alexandria Country Day School in Virginia where staff accidentally served margaritas to students for lunch. This began the day before the first day of classes when teachers celebrated the year’s international focus of Mexico with nachos and margaritas. Some drinks were left over, put in the refrigerator, mistaken the next day for limeade, and given to primary school students. The school went into crisis mode, monitored the children (most didn’t like the drinks and avoided them), notified parents with letters, and banned alcohol from campus. The Headmaster wrote, “We ask the students to be honest and admit their mistakes, and we should do the same.”
We learn a lot from others. The people above taught us well.